Impact of Default Distance on Financial Warning of Listed Companies

Abstract

Distance to Default is a measure of credit risk based on stock trading data. According to the result, the default distance can improve the goodness of fit and forecasting ability of the financial early-warning model, but the improvement effect is limited. And with the increasingly fierce market competition, the impact of financial risk on the survival and development of enterprises is also growing. Modern enterprises must fully understand the causes of financial risks, establish and improve risk control mechanisms, prevent and resolve various financial risks in the development of enterprises, To ensure that the development of enterprises toward a reasonable, scientific and healthy direction.

Keywords: default distance, financial crisis, financial warning